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2013 (2) TMI 460 - COMMISSIONER OF CENTRAL EXCISE (APPEALS), CHENNAIIntellectual Property Service – Whether the assessee is liable to pay service tax on the royalty charges paid by them to their foreign collaborator during the disputed period under the category “Intellectual Property Rights” – Assessee is manufacturers of Ceramic Fibre Bulk, Ceramic Fibre Product sentered – Entered into know-how agreement dated 1-2-1995 and pays royalty at 1.3% of the salesof the Ceramic Refractory Fibre manufactured using the Spun Fibre process for which the know-how was importe – Not registered with the Department nor paid the Service tax on the royalty under “Intellectual Property Service” – Held that:- The continuous payment of royalty by the appellant proves that the transfer of technical know-how is not on one time affair and the up-gradation of the same is taking place for which the royalty charges are being paid during the disputed period. Assessee is liable to pay Service tax under IPR Service – Against the assessee. Further Section 66A was inserted by Finance Act,2006 w.e.f. 18-04-2006 – because of the enactment of Section 66A, a person who is resident in India or business in India becomes liable to be levied service tax when he receives services outside India from a person who is non-resident or is from outside India – Therefore assessee is liable to pay Service tax along with interest on Royalty payments w.e.f. 18-4-2006 – Against the assessee.
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